Prediction markets are designed to aggregate information and produce predictions about future events. Prediction markets are also known as “idea futures” and “information markets” Future events could range from a political candidate's reelection, the box office take for a particular movie, to the probability that the Federal Reserve will increase interest rates at its next meeting.
Some operators of prediction markets use a standard futures contract to elicit or encourage participation in the predictions. The contract payoffs are tied to the outcome of an unknown future event, and the price at which the contract trades reflects the market's consensus opinion. For example, a contract might pay $100 if a candidate is reelected to office, or nothing if he/she is not reelected Until the outcome of the election is decided, the trading price reflects the traders, collective consensus about the expected value of the contract The expected value of the contract is typically proportional to the probability of the candidate's reelection, Such prediction markets thus assist in arriving at a consensus of the estimate of the most likely outcome of the future event, and the predictions can be used in related decisions.
Some types of prediction markets currently operate on the internet. For example, the Iowa Electronic Markets (IEM) can be found at the internet address http://www.biz.uiowa.edu/iem/index.html. This site is primarily concerned with political markets and economic indicator markets and it is also used for teaching and research.
Another internet site concerned with prediction markets is the Hollywood Stock Exchange (HSX). It can be found at the internet address http://www.hsx.com. HSX is a virtual stock exchange that allows trading in shares of actors, directors, upcoming films and film-related options. One of its more popular events is to predict the box office gross receipts during the first four weekends of the release of a new film. The price of the stock associated with the new film typically reflects the anticipated box office gross receipts.
The U.S. Department of Agriculture also conducts periodic surveys. However, such surveys are generally out of date by the time that they are published or become publicly available, Thus, the results of these surveys have primarily historical value.
Various other kinds of surveys exist to elicit present opinions of participants. For example, surveys of the type that ask whether you agree, strongly agree, mildly disagree or strongly disagree, and the like, with an expressed statement or opinion are well-known and are frequently referred to as a Likert scale. Typically, these surveys are conducted at a single point in time. Moreover, if follow-up surveys are conducted on subsequent dates, the opinions expressed by the participants may be unlikely to change from the few choices or categories provided. That is, even if a participant's opinion changes somewhat between the times of the surveys, the amount or degree of change may not be enough to sway the participant to select a different category, such as moving from an agree choice to a mildly disagree choice. On the other hand, if a participant does change his/her opinion from agree to mildly disagree, the change in degree may be exaggerated due to the limited number of selectable options or choices. Obtaining timely, accurate and meaningful information from a survey is not an easy task.
There has therefore been a long-felt need for improved methods of conducting surveys or contests to obtain richer informational content and feedback from the participants.
A general object of the present invention is to therefore provide improved methods of conducting surveys or contests to obtain richer informational content from the participants.
Another object of the present invention is to provide improved methods of conducting surveys or contests to continuously obtain informational from participants over a period of time, such as over a period of several weeks or during different phases of a crop cycle.
A further object of the present invention is to provide contests which encourage participants to revise their current estimations within the time interval of the current contest.
Yet another object of the present invention is to enable the participants to express levels of confidence in their estimates of an event in a contest.
A still further object of the present invention is to provide points per estimation for each of the estimations entered in the contest.
Another object of the present invention is to provide distribution options for the points per estimation, such as uniform distribution, triangular (peaked) distribution, increasing distribution and decreasing distribution.
Yet another object of the present invention is to continuously receive estimations in a rich data format from a significant number of participants.
A still further object of the present invention is to directly receive information from prescreened and qualified participants who have first hand information about the subject matter of the contests.